Canadian equities up on IMF plan, upbeat data

SAN FRANCISCO (MarketWatch) — Canadian equities closed higher Wednesday, finding support from news that the International Monetary Fund aims to expand its lending fund to a total of $1 trillion, as upbeat U.S. data provided a lift to U.S. stocks.

The S&P/TSX Composite Index ($ISPTX) rose 0.8%, or 94.69 points, to close at 12,327.52, off the session’s high of 12,346.74.

“Based on staff’s estimate of global potential financing needs of about $1 trillion in the coming years, the [IMF] would aim to raise up to $500 billion in additional lending resources,” an IMF spokesman said in a statement. “At this preliminary stage, we are exploring options on funding and will have no further comment until the necessary consultations with the Fund’s membership have been completed.” Read more on the IMF.

At this point, there are “far too many unknowns,” said economists at Scotia Capital, in a note, pointing out the uncertainty surrounding who would “pony up” such funds and what form the funds would come in.

For now, Canada stocks tracked U.S. stocks higher. A measure of builder confidence in the U.S. for newly built single-family homes rose in January to the highest point since June 2007. Read about the home-builder gauge.

Separately the Federal Reported that U.S. industrial production rebounded in December after slipping in the previous month. Against that backdrop, the S&P 500 Index
SPX, -1.66%
finished above 1,300 for the first time since late July. Read about industrial production.

Meanwhile, the Bank of Canada on Tuesday maintained its target for the overnight rate at 1%.

It left the overall outlook for the nation’s economy little changed from its October policy report, but also said the outlook for the global economy has deteriorated and uncertainty has increased since the October report.

The central bank released its Monetary Policy Report on Wednesday. The tone from the report shows that “despite the strong growth in 2011, the bank remains cautious,” said Andrew Kelvin, senior fixed income strategist at TD Securities, in a note. “The crisis in Europe remains the dominant risk to the outlook and the bank is unlikely to begin tightening policy until that risk has been resolved.”

Shares of Bombardier up, TransCanada, RIM fall

But the S&P/TSX Capped Information Technology Index (TTTK) rose 0.2% after spending much of the session trading lower.

Shares of Research In Motion Ltd. (RIM)
RIMM
however, fell 1.6% after Samsung Electronics Co. denied a report that it was considering a buyout of the smartphone maker. Read more on RIM.

Shares of TransCanada Corp. (TRP) also fell by 1.1%. The Obama administration on Wednesday rejected TransCanada’s permit application to build and operate a pipeline from Canada to the Gulf of Mexico. In a statement, TransCanada said it plans to re-apply for the permit.

Shares of Kinross Gold Corp. (K)
KGC, +0.78%
saw its stock tack on 1.4%. The stock sank 21% on Tuesday after Kinross said it will require an additional six to nine months of analysis and planning to develop its Tasiast gold mine in Mauritania and expects to record a “material” non-cash impairment charge in connection with the project. Read more about the Kinross mine.

In currencies, the Canadian dollar gained ground against the greenback. The U.S. dollar
USDCAD, +0.0152%
traded at 1.0114 in recent action, down 0.4% from late Tuesday.

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